Arginine vasopressin (AVP) and related peptides, when administered exogenously, prolong the duration of tolerance to ethanol by an action at CNS V-1 receptors. Previous work suggested that stimulation of c-fos expression in the septum by AVP contributes to this action, and current structure-activity studies of peptide (AVP(4-9), nerve growth factor) effects on ethanol tolerance support this hypothesis. The finding that a V-1 receptor antagonist enhanced the rate of loss of ethanol tolerance suggested that endogenous AVP is important for maintaining tolerance. Studies with rats bred to contain the diabetes insipidus (DI) gene (which do not produce functional vasopressin) were carried out to evaluate this postulate. Rats homozygous for the DI gene acquired functional ethanol tolerance, but lost it more rapidly than normal rats or those heterozygous for the DI gene. These data led us to examine AVP synthesis during chronic ethanol treatment. In both mice and rats, hypothalamic AVP mRNA was decreased by chronic ethanol exposure. The data, particularly in rats, suggested that the effect of ethanol was most apparent in animals in which there was concomitant activation of the hypothalamo-neurohypophyseal system (e.g., dehydration). In situ hybridization also revealed that dehydration increased, and chronic ethanol ingestion decreased, vasopressin mRNA in hypothalamic areas outside the SON and PVN and in the bed nucleus of the stria terminalis, an extrahypothalamic nucleus whose neurons project to the lateral septum. These results indicate that an increase in vasopressin synthesis in brain is not necessary in order for the hormone to maintain tolerance. Understanding the mechanism by which AVP influences tolerance to ethanol may lead to benign means for the manipulation of tolerance and, possibly, of ethanol intake.